Historic 1 Front Street to hit market as Crown wraps sale

The historic Dominion Public Building, prime downtown Toronto real estate, is about to hit the market after the federal government finalized the sale to the Canada Lands Company, the Crown corporation responsible for the management and redevelopment of government properties.

As of March, roughly 1,900 federal bureaucrats were working in the building at 1 Front Street, including those with the Canada School of Public Policy, the Southern Ontario office for the Canada Border Services Agency and the Canada Revenue Agency’s Toronto Centre Tax Services Office. But as iPolitics has learned, the building itself will be on the market within days as the federal government forges ahead with a plan to move those employees to offices outside of the downtown core.

However, government officials say the release of the Investment Analysis Report conducted to recommend the best course of action for the government’s disposal of the property, which iPolitics requested under Access to Information laws six months ago, is still being delayed by third-party consultations.

“The sale to CLC recently closed. It is our intention to put this property on the market in the coming days seeking interested purchasers. We have engaged the services of a broker to assist us,” CLC spokesperson Manon Lapensée wrote in an email to iPolitics.

One interested purchaser is believed to be Ivanhoé Cambridge, the real estate subsidiary of the Caisse de dépôt et placement du Québec. But they declined to comment.

“We do not comment on rumours or speculations in the market regarding our investment strategies,” spokesperson Sébastien Théberge told iPolitics.

Though there have been rumours for years that the federal government would sell the 38,000-square-foot building next door to Union Station, Public Services and Procurement Canada (PSPC) only declared it surplus to its needs in February 2015.

“CLC is well positioned in their role, as the Crown’s real estate developer, to determine the best strategy for this site and realize the maximum value of the property for the taxpayers of Canada. The sale of this property will adhere to Treasury Board policies,” CSPC spokesperson Emily Chau told iPolitics last August.

Question period briefing documents prepared for Public Works and Government Procurement Minister Judy Foote, and obtained by iPolitics last March through an access to information request, stressed the need to move Toronto bureaucrats to “longer-term, lower cost accommodation options” outside of the downtown core.

“Most of the departments do not have an imperative business case to operate in downtown Toronto,” the briefing documents say.

“The building is currently not fulfilling the obligation to be at the highest and best use as there is unrealized additional density associated with this location…The anticipated reduction in federal presence in downtown Toronto does not support continued retention of this building in the portfolio.”

The Investment Analysis Report should provide the detailed justification for that conclusion.

“They are part of the critical audit trail that helps to measure whether the Real Property Branch (of Public Services and Procurement Canada) and its specific regions and units are achieving the desired results,” a PSPC guide explains.

“More specifically, IARs provide a critical reference point in assessing project and program performance after project completion, for example, in terms of timing, cost and measuring actual results against expected project financial and qualitative benefits (e.g. sustainability).”

Public Services received the access to information request for the IAR for the Dominion Public Building sale on August 8 and requested an extension a month later.

In October, the access to information officer responsible for the file said third-party consultations were ongoing.

“Unfortunately, I can’t give you an estimate on how long that may take. But we are working on your request and a response will be sent to you as soon as we finish reviewing the records and negotiating with the third party,” the officer wrote in October.

On Thursday, the ATIP officer provided another update, reiterating that third-party negotiations are ongoing in an effort to disclose the most information possible.